A blog maintained by the team working to hold
oil giant Chevron accountable for its human rights
and environmental abuses in Ecuador

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Wednesday, December 19, 2012

Chevron’s new “witness” in the
Ecuador case, Fernando Reyes, is the latest in a long line of company
operatives whose comments have backfired against the oil giant in the
long-running environmental litigation in Ecuador.

The
growing list of discredited Chevron witnesses features a convicted felon who
secretly videotaped a judge, an environmental expert who designed a soil
sampling plan to make sure Chevron did not find contamination, a Chevron
employee who ran a supposedly “independent” lab controlled by the oil company,
an independent academic who turned out to be affiliated with a think tank that
denies global warming, and a “technical expert” who turned out to be a former
top lobbyist for the chemical industry.

Reyes
is an oil industry technician in Ecuador who worked briefly for the rainforest
communities several years ago as part of their effort to monitor Chevron’s
attempts to sabotage the trial. In his declaration – parts of which
appear to be written by Chevron lawyers -- Reyes claims the plaintiffs did not
believe in their own evidence, which is simply untrue as these summaries
demonstrate. See here, here,here, andhere.

In
fact, Reyes could not point to one piece of evidence to contradict the
overwhelming scientific data (including more than 80,000 chemical sampling
results) that formed the basis for the $19 billion judgment against the
company. See here. Even Chevron’s own lawyer, Rodrigo Perez
Pallares, admitted in an advertisement the company deliberately dumped 16
billion gallons of toxic waste into Amazon waterways. See hereand here. That’s about 85 times more oil waste
than BP spilled in the Gulf of Mexico in 2010.

It turns our that Reyes worked
for Fugro McClelland, a geotechnical consulting company paid by Chevron to
audit its operations in Ecuador in the early 1990s. He currently works
for Ivanhoe Energy, an oil industry stalwart with operations in China,
Mongolia, and Ecuador.

TheFugro audit, released during the trial of
Chevron in Ecuador, contradicts the contention by Reyes that the contamination
was not as severe as the lawyers claimed. That report said: “All produced
water from the production facilities eventually discharged to creeks and
streams” except for one of the 376 well sites and separation stations operated
by the company. Seehereand here for more details.

Reyes later worked for Fugro as
part of Chevron’s remediation in the mid-1990s, which is widely condemned as a sham.
That is to say, Reyes, by his own admission, took part in one of the largest environmental frauds in history– one that Chevron lawyers tried
to use as a defense in their failed strategy during the Ecuador trial.

Reyes
claims he was not paid for his affidavit. We’re not so sure. It was
signed in Colombia, so at a minimum he received an all-expenses paid trip to
that country – similar to the one Chevron offered Mary Cudahee, an American
journalist Chevron tried to recruit to spy on the plaintiffs.
Reyes was also trying to insinuate himself into the Ecuador case to make as
much as possible, according to Pablo Fajardo, the lead lawyer
for the rainforest communities.

We
clearly remember Chevron’s claim that Diego Borja, the Chevron contractor who
orchestrated a failed video entrapment scheme against a sitting judge in
Ecuador, was motivated by “civic duty”. Chevron’s scheme completely
backfired. Later, Borja admitted that the company paid him at least $2.2
million for his efforts while describing him as a “Good Samaritan”. See here.

Reyes
is yet another Chevron “witness” peddling junk science and fake facts. We
hope he shows up in court to face cross-examination so the truth can be fully
disclosed, unfiltered by Chevron’s legal team and the fake narrative being
peddled by the company’s six public relations agencies. Other witnesses
presented by Chevron in the Ecuador matter whose credibility was quickly blown
up include:

Diego Borja, the mastermind of Chevron’s video entrapment scheme in Ecuador, ended up confessing he was paid $2.2 million for his services, that he “cooked” evidence during the trial by switching out dirty soil samples for clean ones before submitting them to a laboratory, and that he set up dummy companies for Chevron to make a lab controlled by the oil giant appear to the court like it was independent. See here and here.

Borja’s partner Wayne Hansen, who Chevron portrayed as an “American businessman” who worked in the remediation field, was actually a felon convicted of importing 275,000 pounds of illegal narcotics into the United States.

Sara Portilla, Borja's wife who ran Chevron's supposedly "independent" lab in Ecuador while her husband manipulated soil samples at the well sites; she now works for Chevron in the U.S. Seehere.

Thursday, December 13, 2012

Shareholders can
now reasonably question whether Chevron CEO John Watson is fit to lead
America’s second-largest energy company. Increasingly, Watson is acting
like a palace dictator surrounded by yes men who only deliver good news as the
streets rage in protest.

Recently, Watson
ventured out of corporate headquarters and entered what he thought would be a
friendly setting at the prestigious Council On Foreign Relations in New York
City.

Even there, he was
confronted by the Ecuador reality.

After his remarks,
the first question that hit Watson was from a Wall Street Journal editor who
asked about the Ecuador liability that he said was “dogging” the company.
Watson had this to say in response:

"We are
largely winning in the court of public opinion. You see much less written
because anyone who has done their homework knows it’s a fraud and so we’re
winning in the court of the public opinion, we’re making great progress in the
courts but yes we do have to fight and we’ll fight it till we win."

Chevron now faces
asset seizure actions targeting $15 billon in company assets around the world,
including massive oil fields in Brazil and Canada critical to the company’s
long-term strategic growth. In the meantime, Watson’s lead U.S. law
firm fighting the litigation – Gibson Dunn & Crutcher -- has been slammed
for committing ethical
violations on behalf of Chevron.

The Ecuador case is
not only costing Chevron massive sums in legal fees, but is putting Chevron at
a competitive disadvantage worldwide. The company already is being forced
to suspend planned investments in places where it faces asset seizure actions.

Watson believes
much less is being written about the case? Click on the links below and
see just how out of touch Watson has become.

Monday, December 10, 2012

Embattled by a
$19 billion judgment in Ecuador, Chevron’s management team -- headed by CEO
John Watson and General Counsel R. Hewitt Pate -- seems to be forgetting that
shareholders actually own the company where they work. In their increasing
arrogance, these fine men seem to ignore this basic truism of the corporate
form.

This disturbing
phenomenon at Chevron has become even more evident in an article published
Sunday by one of the top business writers for The New York Times, Gretchen
Morgenson. Morgenson weighed in on Chevron's attempt to intimidate and
harass an institutional shareholder for urging the company to take
responsibility for one of the world's largest environmental disasters in
Ecuador. Chevron has undertaken an aggressive legal strategy against the
Ecuadorians who filed the lawsuit and any shareholder who has raised questions
over management’s mishandling of the litigation.

Morgenson
reports that Trillium Asset Management, which oversees $1 billion in
sustainable investments and is a Chevron shareholder, has been subpoenaed by
the company in its so-called "extortion" case against the Ecuadorians
and their lawyers and consultants. Trillium, as Morgenson points out, has
asked the Securities and Exchange Commission to determine if Chevron has
"adequately explained"its
litigation risk. It also sponsored a shareholder
resolution last yearrequiring Chevron’s Board of Directors to hire an
independent expert to analyze its environmental practices.

Essentially,
Morgenson suggested that Watson and his team have an obligation to shareholders
to answer their questions and grant them their right to criticize the company
without trying to intimidate them into silence.

She
writes, "Trillium's activities do not seem outlandish. Hiring an
independent environmental expert to sit on a board is a common shareholder
request these days and asking the S.E.C. to review a company’s disclosures is
fair game for shareholders. And yet, the receipt of the subpoena seems to
indicate that Trillium’s work has drawn the company’s wrath. It is not
alone."

Morgenson
explains that Chevron also has attacked another large shareholder, the pension
fund of New York that owns approximately $800 million of Chevron stock. Chevron
has asked for an investigation into State Comptroller Thomas DiNapoli for
calling on Chevron to settle the case as a way to mitigate its risk. See
here.

Although
Morgenson did not touch on it, Watson seems to have created a delusional
psychological shell for company management. When it comes to the Ecuador
risk, he continues to mislead shareholders as demonstrated by this chilling
report by securities lawyer Graham
Erion. His recent comments to the Council on Foreign Relations – where he
inserted himself personally into the litigation -- have to be disconcerting to
anyshareholder.

In short, given
his utter failure to confront the Ecuador reality honestly, shareholders can
now reasonably question whether Watson is even fit to lead the company. It is
already publicly documented that he suffers from a conflict of interest on the
matter, having been a lead Chevron official who never adequately vetted Texaco
for the Ecuador liability when Chevron bought the company in
2001. We note that last year Watson suffered a series of stunning
rebukes from shareholders at the company’s
annual meeting related to the Ecuador matter.